Dubai's average price fell for the first time since 2021, yet AED 10m+ sales hit a record. Islay Robinson on why Dubai is now two separate markets.

Dubai's Property Market Is Splitting In Two: What The August Data Really Shows

Dubai's average residential sales price fell to AED 1,636 per square foot in August 2026, down 1.7% year on year, according to Cavendish Maxwell. It is the first annual decline recorded since February 2021. In the same month, the number of transactions above AED 10 million (roughly US$2.7 million) rose to 193, a record, up from 149 in June. The largest single sale was an AED 79 million property at Orla Infinity on Palm Jumeirah.

I have had this conversation with clients several times this month, because the headline figure and the top of the market point in different directions. The explanation is not that one number is wrong. It is that Dubai is now behaving as two markets with different drivers, and the citywide average describes neither of them particularly well.

What The August Data Shows

Dubai Land Department figures show 11,600 property sales worth AED 27.89 billion in August, alongside AED 14.36 billion in mortgage lending. Beneath those totals, the market has split.

The entry-level segment, which is most exposed to new supply, has cooled after several years of rapid growth. The ultra-prime segment has not followed the same pattern. At that level, buyers are choosing specific developments and locations, and financing costs play a smaller part in their decisions.

Why The Average Price Is Falling

Supply is doing most of the work. Cavendish Maxwell's residential market research has identified a substantial pipeline of new residential supply, with close to 300,000 units projected to enter the market by 2028 and a significant portion expected during 2026 and 2027.

The average price per square foot should also be read with that in mind. When a growing share of sales comes from new mid-market stock, the citywide average can fall even where values for comparable properties are holding. In my view, part of August's decline is likely to reflect that shift in the mix of what is selling, as well as genuine softening in the segments facing the most new supply.

Prime and branded property, where supply is genuinely constrained, has so far been largely unaffected.

Why Ultra-Prime Dubai Moves On Different Drivers

The mistake I keep seeing is treating a citywide average as a single market. Dubai's ultra-prime segment behaves more like Mayfair or Monaco than like the rest of the emirate. It responds to global capital flows and to the scarcity of specific assets, not to the apartment supply pipeline.

That shows up in what clients are telling us. Those financing purchases above AED 30 million (roughly US$8 million) are reporting more competitive bidding for the right property, not less, and are structuring their offers with that in mind. At this level, the question is rarely whether the market is rising or falling on average. It is whether a buyer can secure one of a small number of properties that meet their criteria when it becomes available.

Islay's View

From the conversations I'm having with clients, the important distinction in Dubai right now is between buying into a broad market and buying a specific asset. At the ultra-prime end, buyers are not simply responding to the average price per square foot. They are assessing location, scarcity, quality and the long-term appeal of the individual property.

That is also changing the role of financing. For a buyer looking at a property worth AED 30 million or more, securing the right financing structure before making an offer can be as important as negotiating the purchase price. When suitable properties are limited, being ready to move can make a material difference to how an offer is received.

What The Record Deal Count Tells Us

A record 193 transactions above AED 10 million in a single month is a strong figure on its own, but composition matters as much as the count. Branded residences, developments carrying a hotel or luxury-brand name and the scarcity that comes with it, have made up a significant share of this year's largest deals. That pattern has held through most of 2026.

The largest August transaction was an AED 79 million off-plan four-bedroom property at Orla Infinity on Palm Jumeirah, registered on 11 August 2026.

For buyers, the practical implication is that pricing and competition in branded and prime locations can look very different from the market-wide data they read in the headlines.

Softer Volumes, Not A Weaker Market

Overall volumes for the first half of 2026 were lower than a year earlier: 79,281 residential sales worth AED 221.4 billion, against 91,973 transactions worth AED 262.6 billion in the first half of 2025. The comparison is with an unusually strong period, and analysts have described the change as more measured buyer activity rather than genuine weakness.

August's split between a softer average price and record activity at the top end is consistent with that reading.

The distinction matters for buyers because a reduction in overall transaction volumes does not necessarily mean that every part of the market is weakening at the same rate. The type of property being bought, its location and its scarcity can have a significant influence on both demand and pricing.

What To Watch This Autumn

September has historically been one of the busiest months in the Dubai property calendar, as buyers who deferred decisions over the summer return. AED 10.67 billion changed hands in the first five trading days of this September alone. Five days is a short window, but it is an early sign the seasonal pattern is holding.

The more important question is how long the two halves of the market keep moving apart. Much of the new supply lands over the next two years. If it continues to weigh on the mid-market while scarcity keeps the top end competitive, the gap between Dubai's average price and its prime market is likely to widen before it narrows.

Anyone reading the headline figure without separating the two risks drawing the wrong conclusion about either.

For buyers considering a high-value Dubai purchase, the market therefore needs to be assessed at property and location level rather than through the citywide average alone. The financing structure should also be considered alongside the purchase price, particularly where the property is at the ultra-prime end of the market.

Your home may be repossessed if you do not keep up repayments on your mortgage. This article is for general information only and does not constitute tax, legal or investment advice. Enness Global Limited is authorised and regulated by the Financial Conduct Authority (FRN 565120).